Relief Rally Continues, Gold under Pressure  

Asian indices continue higher for the second day as investor digesting the news that President Donald Trump suspended plans to impose tariffs on Mexico but the market’s going to remain sensitive to trade news flow for some time particularly as we head into the G20. The Nikkei225 finished 0.33 percent higher to 21,204 the Hang Seng benchmark in Hong Kong, finished 0.81 percent higher at 27,796. The Shanghai Composite finished 2.58 percent higher to 2,925, while in Singapore the FTSE Straits Times index finished 0.63 percent higher to 3,208. Australian equities climbing 86 points or 1.34% to 6530 as broad-based gains help lift the market.

European session started on positive foot today as the relief rally continues for the fifth trading day in a row as traders cheer the U.S. – Mexico deal. DAX30 is adding 1.22 percent to 12,193, CAC40 is 0.53 percent higher at 5,411 while the FTSE MIB in Milan is trading 0.59 percent higher at 20,606. The London Stock Exchange is 0,47 percent higher to 7,410 as the Brexit uncertainty continues.

XAUUSD Hourly (H1) Chart

In commodities markets crude oil retreats from recent high today and trades at 53.82. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades lower to $62,70 per barrel as major oil producers have yet to agree on adjustments on output. Gold trades lower giving up 2 dollars to 1,324, as news from the US-Mexico front calms investors who are dumping safe-haven assets. The precious metal broke below the 50 and 100 hour moving averages turning the short term technical picture to bearish. Gold will find support at 1300 round figure and then at 1295 the 100-day moving average while more bids will emerge at the 50-day moving average at 1287 on the upside resistance stands at 1344 the high from the previous week.   

In cryptocurrencies market, bitcoin (BTCUSD) continues the consolidation below the 8,000, mark, the daily low for BTC was at 7,899 and the daily high at 8,047. Immediate support for BTC stands now at $7,411 the low from the previous week, on the upside strong resistance now stands at 8,000 round figure. Ethereum (ETHUSD) recovers yesterday losses and trades to 245, with capitalization now to 25 billion. On the upside, the immediate resistance stands at 287 the recent high while the support stands at 200 round figure, Litecoin (LTCUSD) is the outperformer today adding 10 dollars to 129. The crypto market cap holds above $173.0B.

On the Lookout: Olli Rehn is in the news saying that the ECB could strengthen forward guidance, cut interest rates, and relaunch QE if needed. The European Monetary Union Sentix Investor Confidence came in at -3.3, below expectations (2.9) in June.

In Australia macro news according to the NAB Business survey, business confidence levels for May were the highest since July 2018 in reaction to the re-election of the coalition government during the month.

Trading Perspective: In fx markets, USD trades flat at 96.65 on speculation over Fed rate cut, while the Aussie dollar trades lower to 0.6957 despite positive news from Chinese trade data. Kiwi also trades lower to 0.6593 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD is flat for one more day trading above and below the 1.27 mark as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2669 and the daily high at 1.2702. Major support now stands at 1.26 recent low. On the upside immediate resistance now stands at 1.2723 the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Pound futures markets the open interest increased by 4.5K contracts on Monday, the volume went up by almost 67.8K contracts.

EURUSD started the day higher breaking above the yesterday high and is trading at 1.1325. On the upside, the immediate resistance stands at 1.1331 the high from Asian session, while more offers will emerge at 1.1367 the 200-day moving average. Support stands at 1.1273 the 100-day moving average, while more bids will emerge at 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest increased by more than 25K contracts on Monday, volume, shrunk for the second day in a row, this time by around 28K contracts.

relief rally
EURUSD Daily Chart

USDJPY trades flat to 108,68, today the pair hit the low at 108.34 and the high at 108.66. The pair will find support at 107.84 recent low, on the upside immediate resistance for the pair now stands at 108.71 the high from the Asian session. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED next move.

In Yen futures markets, open interest shrunk by around 1.5K contracts, while volume rose by around 20.3K contracts.

USDCAD consolidates to recent low and trading as of writing at 1.3261 close to daily low as the rebound in crude oil prices, Canada’s main export item, seems to have added further strength in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at 1.3200 round figure. On the upside, immediate resistance stands at the 1.33 zone before an attempt to 1.3348 where the 100-day moving average stands.